Kadena, a popular public L1 blockchain using Chainweb architecture for DeFi protocol deployment, RWA tokenization, and AI-led application integration, has issued a new report examining RWA tokenization standards. In its report, Kadena has categorized ERC-3643 as the top compliance-ready standard for real-world asset (RWA) tokenization.
Additionally, the report also emphasizes the significant requirement for efficient, compliance-ready protocols while financial institutions are adopting blockchain technology for tokenization of assets.
ERC-3643 Emerges as Top Compliance-Ready Standard for Compliant RWA Tokenization, Says Kadena Report
Kadena’s report highlights a paradigm shift from the traditional ERC-721 and ERC-20 standards, which are deficient in compliance capabilities that institutions require. Hence, the institutional players are overwhelmingly embracing the ERC-3643 standard when it comes to real-world asset (RWA) tokenization. The respective standard delivers compliant RWA tokenization because it has built-in AML/KYC checks, programmable compliance, jurisdictional controls, and investor accreditation.
In the report, the platform mentioned the widespread use of ERC-3643 in driving more than $32B in overall tokenized assets. Thus, the platform anticipates the tokenized asset sector’s jump to the $2T-$11T range by 2030, led mainly by institutions embracing compliance-first infrastructure. Particularly, Kadena’s Founder, Stuart Popejoy, asserted the importance of compliance in institutional adoption and the key role of standards such as ERC-3643.
Kadena Mirrors ERC-3643 in New RWA Token Standard Backed by $25M
Apart from that, Kadena is developing a separate Real-World Assets (RWA) token standard by leveraging parallel-chain architecture and Pact smart contract language. Backed by a massive $25M fund, the token standard prioritizes security and scalability. Additionally, the new token standard also mirrors compliance capabilities of ERC-3643, and the real estate fund named “CurveBlock” has already adopted it.
According to Kadena’s report, ERC-3643 is the ideal standard when it comes to compliance-ready RWA tokenization. Amid the rapid expansion of the RWA world, institutions are swarming this sector while focusing on compliance to operate securely. The report concludes that compliance-led standards offer crucial infrastructure to drive the institutional finance future on blockchain.
Interview Session
To dive deep in the report and to explore Kadena’s perspective, we contacted Annelise Osborne, the Chief Business Officer at Kadena. Annelise Osborne explained the growing role of REC-3643 in the real-world asset (RWA) tokenization. The following interview questions explain the core purpose, compliance, adoption, and tokenization efforts of Kadena.
Q. In your opinion, what makes ERC-3643 more efficient and a better option than ERC-20 and ERC-721 for RWA tokenization?
Ans. We all have to start somewhere, and that somewhere was ERC-20 and ERC-721 for token standards on the Ethereum blockchain. ERC-20 is still the base layer for all sorts of tokens. ERC-721 came out shortly after and is focused on non-fungible tokens (NFTs) to represent a discrete asset like art, a collectible, or a specific asset. As innovation grows, the ERC 3643 was created with embedded functionality, think of it as an ERC-20 token built for securities. The standard includes permissioning and regulatory compliance.
ERC-3643 integrates things like KYC/AML verification, investor accreditation checks, and jurisdiction-specific restrictions directly into the token contract. Standard embedded compliance is hugely beneficial from an institutional perspective. The ERC-3643 offers this. Blockchain is not just about being tokenized; it’s about more efficient capital markets being faster, lower cost, and more secure.
Q. How critical is the compliance for bridging the institutional giants to RWA tokenization?
Ans. Regulation is put in place to protect investors and maintain efficient markets. Compliance is a necessary evil, of sorts, to ensure bad actors aren’t participating. Yes, compliance is paramount when it comes to institutional adoption. That said, there needs to be regulatory clarity within the United States for institutions to participate using digital assets. There needs to be clear guidelines that are black and white. Financial companies know better than to play in the grey. Fiduciaries managing trillions of dollars take regulatory risks.
I do find the global regulatory momentum exciting. The hoodies built this amazing technology, but now we need the suits to come in with their compliance expertise to make it institutional-grade. You need both sides at the table to bridge that gap successfully and to see full adoption
Q. How are Kadena’s RWA tokenization standards better than others?
Ans. I think what sets Kadena apart is that we were built by people who understand both sides of the equation. Our founders came from JPMorgan – they created JPM’s first blockchain innovation lab and worked on the early JPMorgan coin. So they understood from day one that if you want to power global finance, you need infrastructure that’s both innovative and institutional-grade.
Our RWA token standard draws on the widely recognized ERC-3643 protocol. But here’s what I think is really important – we’re not just tokenizing for tokenization’s sake. We’re solving real liquidity and accessibility problems in these markets.
The other piece is scalability and security. We use proof of work, which has proven to be incredibly secure – we had a hack recently and the system didn’t go down. But unlike Bitcoin, our energy consumption is distributed across a web of chains, so we get that security without the environmental concerns. When you’re talking about trillion-dollar markets, you need infrastructure that won’t buckle under pressure.
Q. Keeping Kadena’s efforts in mind, what other factors are required to push RWA tokenization market value by 2030?
Ans. There are really three critical factors beyond what we’re building both within the ecosystem and at Kadena. First is regulatory clarity – and I mean real clarity, not just guidance that leaves institutions guessing. We need black and white rules across major jurisdictions. The US is becoming much more open to innovation and regulatory clarity this year, which is encouraging. Kadena participated in DC speaking with Congress during Crypto Week discussions on the Genius Ac and the Market Clarity Act. We are engaging with both the Global Blockchain Business Council and The Digital Chamber to make sure our voices are heard in Washington DC and beyond. We also have projects with regulators outside the United States that will be announced soon.
Second is education. I wrote “From Hoodies to Suits” because there simply weren’t accessible resources explaining how this technology applies to capital markets. We need business leaders, regulators, and the general population to understand the benefits blockchain can bring. It’s not about disruption – it’s about upgrading our financial infrastructure.
The third factor is interoperability, which is both to connect the financial system to blockchain as well standards within the blockchain and crypto ecosystem. Without seamless connections between all the key pieces of infrastructure, we risk having siloed markets like crypto was before bridges and wrapped tokens. You need the pipes to connect everything together.
That said, I think we’re at a tipping point. When you see BlackRock launching BUIDL, JPMorgan processing hundreds of billions through Onyx, and major institutions getting comfortable with the technology, you know we’re moving beyond the experimental phase. The $2 to $30 trillion market projections aren’t hype – they’re recognition that tokenization is the next tech upgrade for finance, offering opportunities to both decrease costs and increase revenues. Soon we won’t talk about blockchain, but we will appreciate more efficient capital markets.
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